Tuesday, October 27, 2009

Should we expect the rules of a good society to be good for everyone?

In my view, we should expect the rules of a good society to have the assent of nearly everyone but that does not mean that these rules are good for everyone. In particular, the law of liberty – preventing people from interfering with the protected domain of others – cannot be expected to be good for everyone even though it serves the good of all.

A good place for me to begin to explain the point I am trying to make is with Richard Kraut’s suggestion that under certain conditions norms, rules and laws do not serve the good of all (“What is Good and Why”, p31). The example he gives is of a situation in which our confidence that it is wrong to steal could possibly be diminished because “the property system may make it impossible for some to have the material resources they need to maintain their health ...”. Kraut asks: “What objection can be made to taking what is not yours if you need it to sustain the health of your children, and the person from whom you take it has so much that it would do him no good?” The point he is making is that the rule against taking what is not yours “must be evaluated as a component of the social system in which it is embedded”.

I agree that the rule must be evaluated as a component of the social system, but I don’t think we need to be assured that the social system functions in a way that is good for all members before we can endorse laws prohibiting theft. Does Kraut’s example demonstrate that we could expect people to flourish to the same extent in a society with large wealth disparities in which there are no rules against theft as in a similar society where there are rules against theft? I don’t think so. If there were no rules against theft some resources currently devoted to mutually beneficial activities would be allocated to theft and to the protection of property against theft. Those who have a particular aptitude for stealing might benefit, but the costs to other people would clearly outweigh the benefits to thieves.

Some might argue, however, that our disapproval of theft should allow exceptions in circumstances where the thief has great needs and the victim is relatively unaffected. We might approve of such redistributions if we were to choose behind a veil of ignorance about our chances of being in a situation where we might be tempted to steal or of becoming a victim of theft. In the real world, however, how could a potential thief be sure that a potential victim would be relatively unaffected by the theft of any particular item? Even people who wear their wealth lightly can still own items that have great sentimental value.

Such considerations suggest to me that nearly everyone would agree that theft should be prohibited. I think it is likely that support for such a prohibition would be widespread even among population groups whose members have reason to be aggrieved about their treatment under the prevailing social system. In this sense disapproval of theft may be widely considered to be for the good of all, or at least widely considered to be likely to produce better outcomes than would an ambivalent attitude toward theft.

Does it change matters when the redistribution is undertaken by governments rather than by thieves? There are similarities between theft and rent seeking - the competing efforts of various individuals and interest groups to use the coercive powers of the state to have income redistributed to themselves at the expense of other groups in the society (for example through government budget allocations, provision of services, trade protection and other forms of industry assistance). The involvement of governments is an important difference, however, because the decision-making processes of governments may be widely viewed as having greater legitimacy than those of thieves. In addition, the information required to implement modest redistributions that might be given nearly universal assent behind a veil of ignorance – for example, provision of a welfare safety net – is available to governments responsible for implementing such redistributions.

The considerations involved seem to be similar when we come to paternalistic interventions to prevent adults from harming themselves. Norms, rules and laws protect individuals from all kinds of interference by other people, including well-meaning interference to prevent people from harming themselves. It is possible, however, to construct examples where our confidence that it is wrong to interfere is diminished. Richard Kraut gives us the example of a person who has fallen into an acute but curable despondency who proposes to kill himself even though he has many good years ahead of him (p 238). The argument that it is wrong to coerce a person for his own good because this is inconsistent with living in peace with him (see my last post) loses some force if the powers of judgement of the person concerned are obviously impaired.

However, the circumstances in we would condone people coercing others for their own good are extremely limited. We might have somewhat more confidence in intervention by government agencies than by individuals whom we have no reason to trust, but substantial moral hazards are involved whoever is permitted to intervene. Regulation might be more permissible than ad hoc interventions.

Behind a veil of ignorance just about everyone might support regulations that restrict freedom to a minor extent in order to protect vulnerable people whose judgement is obviously impaired. But in the real world it is difficult to frame such regulations to achieve the right balance. For example, in its draft report on gambling the Australian Productivity Commission has recently published draft recommendations that the maximum bet limit on most gaming machines should be set at one dollar and the maximum amount of cash allowed to be inserted into a gaming machine at one time should be $20. While I claim no expertise in this area I think such limits could significantly inconvenience gamblers who want to minimize the time they spend playing mind-numbing machines, without doing much to protect problem gamblers. No matter how low the limits are set, they will not be low enough to prevent some vulnerable people from harming themselves.

This is true of all forms of regulation designed to protect vulnerable people from making bad choices. The rule that is good for all – the rule that nearly everyone would agree to behind a veil of ignorance about their own particular interests and vulnerabilities – will not be good for everyone. We should not expect the rules of a good society to be good for everyone.


Anonymous said...

You probably do need to know something about poker machines and how people play them.

First, they are not that mindnumbing for many people - though they may be for you. So why make that judgement?

Second, the people who play for fun don't spend much and the majority don't bet more than $1 each time they push the button. The most popular machines in Australia and all the venues I know are 1c and 2c - so $1 gets you a lot of lines and a lot of credits per line. By the way - you get through the money pretty quickly with $1 - it's about 4 seconds between button pushes - so 15 a minute and 900 and hour. That's $900 of bets and with a 90% rate of return, the mean spend would be about $90 an hour. The mode is much more because quite a lot of the return is in rarer high value prizes, especially if you play jackpot machines.

But problem gamblers often play furiously - playing at $5 and even $10 each time they push the button. If they had to slow down, they'll be there a pretty long while - and start to stick out like a sore thumb, which they do not like. Will it 'solve' the problem? No way, but it might help enough to inconvenience the few recreational players who'd like to go through their money more quickly.

So it is paternalism to intervene - but people can still play, they can still make losses - big ones if they try - but it's more of a nuisance to do so.

As you say, there's a tradeoff between liberty - at its worst Hobbes' state of nature - and rules imposed on all of us - at its worst, tyranny.

It helps to know a lot about the area where those specific tradeoffs occur before deciding where to draw the line. It's a matter of empiricism, not principle.

Winton Bates said...

My comment about the machines being mind-numbing was based on very limited personal experience. I was quite fond of a three reel gold bars machine about 25 years ago because I could actually understand why it paid and why it didn't pay. The modern machines seem to require a lot of effort to understand how they work. When I asked my mother to explain them to me a few years ago she said that all I needed to know was where to put the money in and what button to press. I think that if you want to gamble on a machine like that, it is better to lose your money as quickly and painlessly as possible.

I also have a more serious point for consideration. Wouldn't it be better for decisions about bet limits etc. to be decided by members of individual clubs rather than by people like Kevin and Nicola (or the proverbial "anonymous bureaucrat")?